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Anything between importing and dropshipping?

by ferez21
7 replies
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Hi,

I was wondering,
If you take the two sides of the e-commerce spectrum, you have:

1) Importing - Buying B2B, get the stock to your directly to your own warehouse, then sell it\pack it\ship it yourself to the end customer.

2)Dropshipping - The other end of the spectrum. No need to hold the physical stock, No need to ship it\process it yourself, all done by your dropshipper. And the most important part, you don't need to order a certain quantity, as you just send him your orders one by one.

Now, i was wandering, is there something between those two?
I have a new small Ebay store, in which i sold a couple of dozens of products through some dropshipper, but the margins are quite low and i want to progress further and improve my services and my store.
Problem is, that currently B2B won't be exactly suitable for me because i can't buy large quantities yet.

Is there a way to say, buy 10 pieces of a certain product from a supplier from china, then send it to some middleman who will do the dropshipping for me?
Is there any other model for people like me who want to extend their margins but still not eligble for a full on B2B?

Thanks,
Erez
#dropshipping #importing
  • Profile picture of the author alksense
    Originally Posted by ferez21 View Post

    Hi,

    I was wondering,
    If you take the two sides of the e-commerce spectrum, you have:

    1) Importing - Buying B2B, get the stock to your directly to your own warehouse, then sell itpack itship it yourself to the end customer.

    2)Dropshipping - The other end of the spectrum. No need to hold the physical stock, No need to ship itprocess it yourself, all done by your dropshipper. And the most important part, you don't need to order a certain quantity, as you just send him your orders one by one.

    Now, i was wandering, is there something between those two?
    I have a new small Ebay store, in which i sold a couple of dozens of products through some dropshipper, but the margins are quite low and i want to progress further and improve my services and my store.
    Problem is, that currently B2B won't be exactly suitable for me because i can't buy large quantities yet.

    Is there a way to say, buy 10 pieces of a certain product from a supplier from china, then send it to some middleman who will do the dropshipping for me?
    Is there any other model for people like me who want to extend their margins but still not eligble for a full on B2B?

    Thanks,
    Erez
    Hi Erez,

    After unloading my first couple containers from China by myself (it was a nightmare) I started doing exactly what you're talking about.

    I'm from New York and my products come from China so to save shipping time (and money) I started having them shipped from Shenzhen to Long Beach, CA where a company would pick up my orders, truck them to their warehouse, break them down, and ship orders for me when I submitted them.

    The company I used is called Hellman Worldwide Logistics and I would highly recommend them. Most of the shipments they handled for me were for full containers but I also did have some smaller shipments delivered to them.

    You can also run a Google search for "fulfillment center" and you will find plenty of other solutions for what you're looking for.

    Hope that helps!
    Anton
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  • Profile picture of the author salehoo
    Originally Posted by ferez21 View Post

    Hi,

    I was wondering,
    If you take the two sides of the e-commerce spectrum, you have:

    1) Importing - Buying B2B, get the stock to your directly to your own warehouse, then sell itpack itship it yourself to the end customer.

    2)Dropshipping - The other end of the spectrum. No need to hold the physical stock, No need to ship itprocess it yourself, all done by your dropshipper. And the most important part, you don't need to order a certain quantity, as you just send him your orders one by one.

    Now, i was wandering, is there something between those two?
    I have a new small Ebay store, in which i sold a couple of dozens of products through some dropshipper, but the margins are quite low and i want to progress further and improve my services and my store.
    Problem is, that currently B2B won't be exactly suitable for me because i can't buy large quantities yet.

    Is there a way to say, buy 10 pieces of a certain product from a supplier from china, then send it to some middleman who will do the dropshipping for me?
    Is there any other model for people like me who want to extend their margins but still not eligble for a full on B2B?

    Thanks,
    Erez
    Hi there,

    I fall somewhere in between. I never import large (container-sized quantities) and I've drop shipped in the past but I now order smaller lots and make more frequent orders.

    ferez21 mentioned a good method, but I'm not sure how much you would save compared to drop shipping as it's essentially the same amount of handling which is where the drop ship fees come in.

    You can still do B2B without the huge volume. I order around $500-$1000 of stock at a time. I like this volume because I don't need a lot of storage, I still get a volume discount, it's low-risk, doesn't cause cash-flow issues (like a $10k order would for me) and there's next to no logistics - the order leaves the supplier's warehouse and arrives at my doorstep about 10 days later. Usually in a couple of separate boxes. Oh, and my margins are great!

    Have you ever thought of something like that? I guess it's called medium-volume wholesale buying. Not all suppliers do it but if you don't ask, you don't get so it's worth asking them, even if they don't advertise lower volume options.
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    Salehoo
    http://www.salehoo.com

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    • Profile picture of the author ferez21
      Originally Posted by salehoo View Post

      Hi there,

      I fall somewhere in between. I never import large (container-sized quantities) and I've drop shipped in the past but I now order smaller lots and make more frequent orders.

      ferez21 mentioned a good method, but I'm not sure how much you would save compared to drop shipping as it's essentially the same amount of handling which is where the drop ship fees come in.

      You can still do B2B without the huge volume. I order around $500-$1000 of stock at a time. I like this volume because I don't need a lot of storage, I still get a volume discount, it's low-risk, doesn't cause cash-flow issues (like a $10k order would for me) and there's next to no logistics - the order leaves the supplier's warehouse and arrives at my doorstep about 10 days later. Usually in a couple of separate boxes. Oh, and my margins are great!

      Have you ever thought of something like that? I guess it's called medium-volume wholesale buying. Not all suppliers do it but if you don't ask, you don't get so it's worth asking them, even if they don't advertise lower volume options.
      Thanks for the reply,

      Nice to know that manufacturers let you make 500$-1000$ purchases, but what about the import process\taxes you have to pay when shipping it to your doorstep (i assume your'e not living in China)?
      And then, you have to handle shipping costs when you ship those products to customers. Eventually, do you find this method gives you better margins than Dropshipping?
      How do you approach manufacturers directly anyways?

      Yesterday i was researching, and i think iv'e found what is in the middle of the spectrum: A fulfillment house, preferably in the same country you buy the goods in.
      Advantage is that you don't have to actually import anything, thus not paying import taxes and stuff, but the disadvantage is that you still don't have full control like you would in B2B.

      And btw, what do you do if you have leftover stock?
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      • Profile picture of the author Importexport
        Originally Posted by ferez21 View Post

        Thanks for the reply,

        Nice to know that manufacturers let you make 500$-1000$ purchases, but what about the import processtaxes you have to pay when shipping it to your doorstep (i assume your'e not living in China)?
        And then, you have to handle shipping costs when you ship those products to customers. Eventually, do you find this method gives you better margins than Dropshipping?
        How do you approach manufacturers directly anyways?

        Yesterday i was researching, and i think iv'e found what is in the middle of the spectrum: A fulfillment house, preferably in the same country you buy the goods in.
        Advantage is that you don't have to actually import anything, thus not paying import taxes and stuff, but the disadvantage is that you still don't have full control like you would in B2B.

        And btw, what do you do if you have leftover stock?
        Sourcing supplies in small quantities direct from manufacturers is easy if you take the right approach. During the 22 years that I ran my importing business until retirement I placed many orders worth less than $500 and I got prices that gave me massive profit margins. Until you get quotes from genuine manufacturers, NOT wholesalers, you cannot imagine how huge the margins can be.

        I taught my franchisees in 4 countries how to import the easy way and that included getting the suppliers to do the legwork for the shipping side of it.

        Using a fulfillment house in the country of origin has no advantages but plenty of disadvantages. Your customers would have to pay duty and taxes when they receive the goods they had ordered. Imagine how thrilled they would be to get that surprise.

        Freight costs are not a problem if you buy at the very best prices. The margins you can get, even when buying very small quantities direct from the factories are so massive that freight and other costs are relatively unimportant.

        That even answers your last question about leftover stock. If you have stock that you can't sell you just reduce the price by 50% or more and you will still make a profit while you liquidate that leftover stock. If your margins will not allow that, you have either bought from wholesalers, dropshippers, or other resellers, or else you have not used the proper method to obtain the best price.

        By the way, haggling is not the way to go unless you are in places like Hong Kong and buying at the tourist shops.

        You don't have to carry a big inventory, because under my "just in time" system you can place small orders timed to arrive just before you would expect to almost run out of stock. They come by air courier, so even if you get the timing wrong there will only be a couple of days delay. Note: I am talking about standard lines, not made to order items.

        You can choose whether to use a fulfillment house or pack and ship them yourself. Amazon may be worth considering as a fulfillment house. I always packed and shipped the goods because there were not a lot of orders. The orders that came in were ones that gave an average of about $500 profit per sale, so I did not mind handling 2 or 3 orders a day. Some days I did none, but if I had been selling huge volumes at tiny profits I would have been kept busy with the paperwork. Which would you prefer?.

        ferez, you will not learn all you need to know by reading posts on forums. Unfortunately there is a lot of well intentioned misinformation posted as well as a lot of opportunist posting by people with something to sell - including me. You have to sort that all out before you can even know what is good information and what is not.
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        Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com
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        • Profile picture of the author ferez21
          Thanks for the reply
          Originally Posted by Importexport View Post

          ferez, you will not learn all you need to know by reading posts on forums. Unfortunately there is a lot of well intentioned misinformation posted as well as a lot of opportunist posting by people with something to sell - including me. You have to sort that all out before you can even know what is good information and what is not.
          Sure, of course i can't learn how to run a business online, but it does give me directions for my market research, so thanks again
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  • Profile picture of the author ferez21
    Originally Posted by alksense View Post

    Hi Erez,

    After unloading my first couple containers from China by myself (it was a nightmare) I started doing exactly what you're talking about.

    I'm from New York and my products come from China so to save shipping time (and money) I started having them shipped from Shenzhen to Long Beach, CA where a company would pick up my orders, truck them to their warehouse, break them down, and ship orders for me when I submitted them.

    The company I used is called Hellman Worldwide Logistics and I would highly recommend them. Most of the shipments they handled for me were for full containers but I also did have some smaller shipments delivered to them.

    You can also run a Google search for "fulfillment center" and you will find plenty of other solutions for what you're looking for.

    Hope that helps!
    Anton
    Somehow i managed to miss your answer, sorry

    This is exactly what i figured out, a fulfillment house is the middle of this spectrum, but why didn't you use a China based fulfillment house? Wouldn't it save you the importing + long distance shipping extra expenses?
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  • Profile picture of the author links123
    I fallen somewhere in between. I do not order bulk quantities, I order mall lots and put orders frequently.
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